The Association of British Insurers (ABI) has issued guidance aimed at helping insurers and long-term savings providers contribute to the fight against biodiversity loss in the UK, as reported by Bloomberg on July 4. The guidance requires members to incorporate biodiversity impacts into their climate transition plans and net-zero targets. They are also encouraged to consider offering new policies, such as covering damage to natural infrastructure. ABI’s Director General, Hannah Gurga, acknowledged the challenges many businesses are facing in assessing their reliance on nature or recognizing its importance to their business strategies. Major insurers, such as Allianz SE [ALV:GR], Aviva Plc [AV/:LN], and Chubb Ltd [CB:US] are among the members of the ABI.
The ABI emphasizes that insurers face increased risks associated with biodiversity loss. Biodiversity loss can lead to more frequent and severe natural disasters, posting a threat to the homes and businesses that insurers protect. Failing to address biodiversity loss also carries reputation risks for companies. To mitigate these risks, the ABI proposes various actions for insurers. These include expanding investment in nature-positive businesses or projects, as well as underwriting or investing in sustainable or green bonds. These recommendations align with the initiatives outlined in the Global Biodiversity Framework, which was agreed upon at the 2022 United Nations Biodiversity Conference (COP15). The framework urges global investors to explore innovative financial solutions to address biodiversity risks and aims to mobilize at least USD200bn in biodiversity-related funding annually by 2030.